Green jobs a bargain at … $23 million per?

posted at 12:45 pm on September 28, 2011 by Ed Morrissey

So far, the number of jobs created through Barack Obama’s green-tech stimulus programs have remained far below administration estimates, and at a far higher cost. Instead of creating 65,000 jobs with $38.6 billion, the first half of the money has created less than 3600 jobs at a cost of $4.85 million per position. Investors Business Daily notes that even this looks like a bargain compared to the deals that the Department of Energy is about to approve with the remaining funds in its green-tech subsidy programs:

The Department of Energy is set on Thursday to announce whether nine federal loan guarantees amounting to $6.5 billion for green energy projects will get final approval.

The number of full-time, permanent jobs they would create? According to the DOE’s own figures, a grand total of 283. That is nearly $23 million per job.

It’s also a drop in the bucket toward the five million green jobs President Obama promised as a candidate in 2008.

The DoE estimates that these guarantees will also generate 3650 construction jobs as well, but those will only be temp jobs for facility expansions. Even counting those as full-time permanent jobs only brings the total number to 3,933 jobs — and at $6.5 billion, that still works out to a cost of $1.65 million per position created. (It would be absurd to count these as part of the overall benefit, especially since that capital may have gone towards business expansion now or in the future had government not seized the capital.)

Oh, and here’s some good news:

In the last week, the DOE has approved three loans totaling $624 million and creating 110 permanent jobs. But two other big loan projects totaling nearly $2 billion reportedly fell through.

So now we’re down to $5.67 million per job! That’s a mere quarter of the cost of the rest of the projects under consideration. I guess Obama’s efforts to cut costs have really begun paying off.

Now, if a private investor saw these figures, they’d laugh the applicant out of the room — and that’s the point we should remember, says Bruce McQuain:

Where’s the private investment? Why are these companies having to seek federal loan guarantees so they can get loans? If they’re viable, as Jerry Taylor points out, the private sector should be willing to invest in them.

Why aren’t they?

In fact, why, given that it appears the private sector is not willing to do so, is the DoE even considering these loans?

Because there’s an agenda at stake here. This isn’t about market viability or sound economics, it’s about trying to save an agenda that promised 5 million green jobs, remember.

And this is what you get. A failed Solyndra and 9 companies the private sector won’t invest in which may create 283 jobs. May. Government estimates about programs it supports have never been known to be overly optimistic, have they?

As I wrote yesterday, government doesn’t pick winners and losers. They pick losers in order to create the perception that they are competitive with the winners. Winners don’t need government subsidies to compete in a marketplace, and viable and competitive technologies attract investors on their own without government help.

We have been giving the green-tech sector public subsidies for decades while politicians engaged in social engineering promise an explosion of world-leading technological leadership and massive energy production all along. Solyndra’s not the first indication that green tech has been a bad bet for taxpayers. We should end all subsidies and favors for energy production — and many of the barriers to it as well — and let the market and investors demonstrate what technologies work best to provide the energy security our economy requires.

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Have been saying it for years and years…if an innovation is going to generate jobs, generate income, and make things better overall, then private investors would be trying to crawl over each other to get the proprietary rights to such or at least throw in with the program in order to realize what’s that dirty word the Progressives hate? Realize a profit

Not a lot of private investors throwing in with Obama’s Green Dreams, are there?

The maxim “if you build a better mousetrap…” still holds true today.

If you require federal tax money taken from working wage-earning citizens in order to stay afloat, perhaps you’d best look at another career alternative.

In lost labor and capital in the private sector alone, I’d guess that the cost per federally funded “green” job is far greater than the amounts announced by DoE.

Ya know, I hate Obama as much as… okay, way more than the next guy, and I hate government waste as well… and yet, “cost per new permanent position created” isn’t really your typical gauge of whether an expenditure is ‘worth it’ or not…

Now, don’t get me wrong, I’m not saying that these loans or expenditures are in fact ‘good ideas’, just that the focus on ‘how many permanent jobs will it create’ isn’t necessarily a good metric, either.

For example, if $50million spent yields a cure for cancer, and yet only 5 permanent jobs were directly created… $10million per job… “worth it”? Or should that expenditure be shunned because of the high cost per job created?

Yes, I know we’re not talking about anything so grand as curing cancer, yet it illustrates the problem with focusing on the cost per job created alone.

I suspect that – like effectively all of the similar loans so far – these will be failures outright on their merits.

Honestly, when we start investing in people instead of worshipping the earth, we will keep wasting money. We should be good stewards of God’s gift to us, but we should not do it at the expense of caring for people.

Thanks. I didn’t bother to look at that nor did I notice it was posted by Tina. I thought it was just more of the same. Now that I’ve opened it I see “Inhofe” so I know it’s in good hands. He’s persistent enough to see it through. Now all we need is a a Republican in the White House and a Republican Senate.

For example, if $50million spent yields a cure for cancer, and yet only 5 permanent jobs were directly created… $10million per job… “worth it”? Or should that expenditure be shunned because of the high cost per job created?

Midas on September 28, 2011 at 1:01 PM

Absolutely YES.

Government involvement in science has been a disaster. Only propaganda from the ministry of education has convinced people otherwise.

For biology, look at the plans for the Human Genome project before private competition kicked them in the ass.

Medical research is horrendously expensive due to FDA regulation.

And those examples are from the time before Obama got started helping out.

I wonder if I can find a video clip of it. While I know that you are correct about it being a niche, they actually said that it is now cheaper to provide power with it than nuclear. I’m a bit skeptical about that because obviously there is night time and overcast skies. At best, I think the story was suggesting that The Won could have chosen a better candidate for taxpayers “loans”. Needless to say, I don’t want to loan money at all and certainly not to a bundler for The Won.

This is a serious question, not meant to start a fight. I don’t know the answer and it could easily be used against the “government picks losers” argument. So, is the government of China also picking a loser? Granted it’s a communist country with only a free-market veneer, but it’s products must compete globally too and eventually one would think their chickens will come home too. So will this end up being a debacle for China on a massive scale when their subsidies for solar need to turn a profit? I don’t think solar or wind can substitute for the on-demand energy we get from oil, coal, natural gas or nuclear. Demand for solar would need to be artificially increased (by government mandate, probably) in order to buy up what is sure to be an oversupply (which will drive down prices) but once that supply saturates the market, distorted as it may be, the demand will dry up and China (or whoever chooses the subsidy route) will be left with a large manufacturing capacity, a bunch of people to use it, and no market. Is that the way China looses too?

It’s legalized money laundering. What happens is they give money to the people who support the Democrats and then donate it back to them. This is your classic money laundering scenario, with the “green jobs” being the intermediary.

Nuclear is expensive (partly) because the environmental lobby has made it so.

Solar is cheap (relatively) only because it is heavily subsidized.

I decided to go to grad school to study nuclear fusion because the received wisdom was that oil and coal would run out soon and uranium would follow.

Unfortunately for me there’s at least 1000 years supply of fossil fuel available so I jumped on the band wagon a bit too soon.

One thing has not changed and that is the people behind the environmental movement (and to my national shame one of the biggest is a Canadian, Maurice Strong, … not to mention the idiot David Suzuki) are socialists and frauds.

As I read in a thread here yesterday, if we don’t go ahead and borrow that $23 million from China, for each job created, China will go ahead and…um…well it was something to do with R&D and Space. And then we’ll really be in…um…something. Oh hell, just ask bayam, I really couldn’t decipher that post detailing how giving billions to connected, leftist trash is a real great thing.

I agree with you generally that “jobs created” isn’t the sole or even primary metric to measure gov’t investment in R&D.

Except, the libs continuously use “jobs created” and the myth of the “green jobs” explosion that is always just around the corner for these type of investments. So, it is fair to point out how incredibly stupid such claims are.

I don’t understand why fossil is perceived as finite. I don’t know the word to use but why would it not still being “produced”? Is the Earth doing anything different that would preclude more? As you can tell, I didn’t go to school for anything so these are probably silly questions. I’m the kind of person who gets excited when I read a Popular Science article that says there is bacteria that eats nuclear waste.

Society uses energy at an increasing rate. The known reserves of fossil fuel are known. One can divide the reserves by the rate of use to give a time at which the fossil fuel will “run out”. Now, economics says that the idea that resources will “run out” is incorrect but we can ignore that for now.

In the 1970s, this calculation gave 30 years as the answer (just for oil, I think).

Bjorn Lomborg has documented in his first book that for each of oil and coal the answer is presently something like 400 years — larger for coal and smaller for oil and gas — and the total for fossil fuels is more than 1000 years. Similarly for Uranium.

So the environmental alarmists can no longer get us to do what they want because the fossil fuel will run out. So they’ve decided that CO2 is a dangerous pollutant.

Keeping in mind that I am ignorant on these things, considering the “new” data, I wonder why the emphasis isn’t on ways to filtering that “dangerous” pollutant. It seems like the more economic way to go. I look at this over my lifetime and we have come a long way. I remember when the Cuyahoga River caught fire and Susie Spotless told us not to be litterbugs. It’s not like we aren’t willing to work against pollution.

The amount of fossil fuels that in single generation of people can access is finite. If you can pause humanity for a few hundred thousand years there would be quite a bit of oil regenerated, but as long as humanity continues to increase the rate at which it uses the resources there is no possible way for the earth to replenish fossil fuels. Simply because of the ginormous time spans involved.

CO2 is not a pollutant. Plants need it to grow. They used to teach that in high school biology when I was in school. The problem is that leading environmentalists lie and their followers are sheep. The word “lie” is not one I use lightly.

It’s pointless. I know she doesn’t like me so I like to poke her but she’s completely predictable. She absolutely must have the last word … I kept her going for two days on the same thread last time. I made a couple of attempts to be nice but failed entirely.

preallocated on September 28, 2011 at 2:30 PM gh on September 28, 2011 at 2:19 PM

I am being so unclear. I understand how a huge increase in demand can impact the reserves and perhaps I am misunderstanding what the “experts” are saying but it seems that oil is no longer being produced by the Earth. That the elements required is no longer available. Then they find “new” vast reserves. Is that strictly the benefit of better geology?

but it seems that oil is no longer being produced by the Earth.
Cindy Munford on September 28, 2011 at 2:36 PM

The idea that oil was “produced” is a theory, which comes from finding fossils in coal deposits. In that theory, it takes thousands to millions of years to “produce” the fuel. Since the earth is believed to be roughly 5 billion years old that’s not a problem. To a human, who will live about 100 years, if lucky, anything that takes longer than that can be viewed to be “not happening”. If the human race survives long enough, it is conceivable that plants growing today may get buried and become petrolium and used by humans at some time in the future. However human evolution seems to be faster than that.

I don’t understand why fossil is perceived as finite. I don’t know the word to use but why would it not still being “produced”? Is the Earth doing anything different that would preclude more? As you can tell, I didn’t go to school for anything so these are probably silly questions. I’m the kind of person who gets excited when I read a Popular Science article that says there is bacteria that eats nuclear waste.

Cindy Munford on September 28, 2011 at 2:11 PM

Cindy,

It is unpopular and un-PC of you to suggest that fossil fuels are not a finite resource. Jazz Shaw does a great job here highlighting how “fossil fuels” are produced, refined, and transported for consumption. He is almost always well versed in the processes to get coal, oil, natural gas out of the ground and in a usable condition for us to consume.

But your question really is a valid one. There have been a couple of articles on deep Earth research and mapping which have identified large veins of hydrocarbons swirling in the Earth’s mantle, and interesting evidence, from deep seismic surveys, that hydrocarbons ARE being produced inside the Earth and may be moving around inside it.

The arguments for Peak Oil assume that the exploration and consumption of hydrocarbons is proceeding at a rate larger than the Earth can produce it. No one knows whether this is actually the case. What is known, is that we continue to find coal, oil and gas, but we usually have to go to new locations to extract it. It doesn’t come back to the old locations previously found at rates sufficient to keep up with how fast we are taking it out of the ground now.

That doesn’t mean it isn’t coming back to previous locations. Just that we are using it a lot faster than the Earth can keep up with pushing it back into the same spots. And it is returning hydrocarbons to these locations in some cases.

(We have a ranch that is routinely used to exploration companies leasing bits of it every 3-6 years and then finding natural gas, extracting it, and then the well goes dry in 18 months. But they always keep coming back and finding more pockets in the same spaces. So it is seeping out of the Earth.

Who is to say what physical and chemical processes are conducted in Earth’s mantle and core that are not the cause of fossil fuel replenishment? All we know is we keep finding more and more of it. The old sites lose productivity, and new sites gush it for a while until they need reservoir enhancements also. We are a long, long way from running out of oil and gas right now, as long as we can look for it. I’m sure civilization will eventually run out of usable sources in several hundred years or even more. But our technology slowly advances on its recovery, and on the efficiency of our machines using it.

I am all for research on other methods of energy production. I am all against using government subsidies to make ANY energy source a winner or loser. I define subsidy as giving money to an industry where they cannot normally make a profit by simply selling their product at a price higher than it costs to make it. It is NOT a subsidy to give any industry a tax break to allow them to write off sunk costs as a part of doing business (i.e. costs of getting the oil out of the ground ought to be deducted from revenues before counting it as profit just as deducting the costs of research and development for new drugs should be written off before profits, and the costs of manufacturing new computer chips and the R&D necessary to design them should be written off before counting profits.)

So your question is valid. The answer is no one knows for sure whether fossil fuels will last a hundred years or ten thousand. But we can always get hydrocarbon energy from Titan, Jupiter and Saturn if we can make it that long. And there aren’t any natives to complain about our existence and energy consumption there…….

1. @djmick, it isn’t money laundering. It is called political patronage and the money returning to our Democrat pols is graft. It is, less politely, corrupt as hell, and it has for far too long been the sore, infected pimple, or perhaps a metaphorical leech on America’s political derriere. Unlike many other countries, it is an undesired feature, not, thank God, the driving force of the economy. It is how politicians get rich while serving in office, or after serving in office.

2. Anyway, it is not really about jobs. It is about our narcissistic politicians desperately needing to be seen as the heros of the country, seen as doing something big, something green, solving our big problems for us. Whether it actually works is completely unimportant to them. What matters is the good PR.

3. $4.85 million per job?? $23 million per job?? I’d take considerably less, be sure to make a nice campaign contribution, and the country would be way ahead. Right?

Government is ill suited to “invest” either in technologies or research. They have no particular expertise, no experience at all, and seek only “consultant” experts who will tell them what they wish to hear.

It is NOT their money, either. It’s one thing to spend tax money on the essential roles of government, quite another just to throw it around to feather friends’ nests and promote their pipe dreams.